A globally diversified single-fund portfolio with a balanced risk profile and low costs

Report created on Jul 21, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is entirely invested in the Vanguard Total World Stock Index Fund ETF Shares, offering a broad diversification across 11 sectors and a wide geographic spread. The allocation is heavily weighted towards stocks (99%), with a minimal cash position (1%), reflecting a growth-oriented strategy while maintaining a balanced risk profile. This single-fund approach simplifies portfolio management, though it limits flexibility in adjusting sector or regional weights independently.

Growth Info

The historical performance of this portfolio, with a Compound Annual Growth Rate (CAGR) of 11.30% and a maximum drawdown of -34.24%, indicates a strong return profile relative to its risk level. The performance is particularly notable given the balanced risk score of 4 out of 7. However, investors should remember that past performance is not indicative of future results, and the significant drawdown highlights the potential volatility associated with a stock-heavy portfolio.

Projection Info

Monte Carlo simulations, projecting 1,000 potential future scenarios, suggest a wide range of outcomes with a median increase of 308.2% and a high degree of simulations (985 out of 1,000) resulting in positive returns. This analysis underscores the potential for significant growth while also highlighting the inherent uncertainty in investing. It's crucial to understand that these projections are based on historical data and assumptions that may not predict future market movements accurately.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's allocation is almost entirely in stocks, providing high growth potential but also higher volatility compared to more diversified asset class allocations. The minimal cash position offers limited liquidity and downside protection. For a balanced risk profile, investors might consider whether introducing bonds or other asset classes could achieve a more desirable risk-return trade-off.

Sectors Info

  • Technology
    24%
  • Financials
    18%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    3%

Sector distribution within the portfolio is well-diversified, with technology and financial services as the leading sectors. This composition mirrors global market trends but also exposes the portfolio to sector-specific risks, such as regulatory changes in technology or interest rate fluctuations affecting financial services. Diversification across sectors can mitigate some risk, but investors should be aware of the potential for volatility driven by sector-specific developments.

Regions Info

  • North America
    65%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic allocation shows a heavy emphasis on North America (65%), with significant exposure to developed Europe and a modest presence in emerging markets and other regions. This distribution reflects a conservative approach to global diversification, favoring more stable, developed markets over potentially higher-growth but riskier emerging markets. Investors seeking broader global exposure might consider increasing allocations to underrepresented regions.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization exposure leans heavily towards mega and large-cap stocks, which tend to be more stable and less volatile than smaller companies. This bias towards larger companies is appropriate for a balanced-risk portfolio, though it may limit exposure to the higher growth potential of small and micro-cap stocks. Diversifying across different market caps can offer a more balanced risk-return profile.

Dividends Info

  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 1.70%

The portfolio's dividend yield of 1.70% contributes to its total return, providing a steady income stream in addition to potential capital gains. For investors particularly interested in income, this yield is a key consideration, though it's relatively modest compared to high-dividend strategies. Balancing growth and income is essential for meeting long-term investment goals.

Ongoing product costs Info

  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.07%

With a total expense ratio (TER) of 0.07%, this portfolio is highly cost-efficient, maximizing the potential for net returns over the long term. Low costs are crucial for long-term investment success, as they compound over time, and this portfolio benefits significantly from its low-cost structure.

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